Sales funnels or marketing funnels as they are also called are critical to the success of any sales and marketing campaign. With careful testing, you can increase your sales conversions and profits exponentially.

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Let’s start by going over the basics of what a sales funnel is before we start talking about why to use them and how to improve yours. First, a little terminology. There are basically three types of people you’ll interact with during the sales process: Leads, Prospects, and Customers.

A lead is someone who becomes aware of your business who you decide to pursue for a sale, even if they don’t know who you are and is considered to be cold traffic.

A prospect is usually someone who has had some kind of contact with your company and they are potentially interested. All prospects are leads, but not all leads are prospects.

Customers are obviously people who have made a purchase of your product or service. You can further separate customers by those who have made only one purchase and those who have made several.

All of these people a part of your sales funnel!

To imagine a sales funnel think of it as an inverted pyramid. With the top being the widest and the bottom being the narrowest. Usually people being a leads at the top and get filtered though your sales funnels to become repeat buyers at the bottom.

A small percentage of leads will be prospects, people who are actually interested in your product or service and who are qualified to buy. It’s a numbers game; the more traffic and potential leads you bring into the sales funnel, the more prospects you’ll have and likewise the more customers you have!

When working on your sales funnel, you want to have two goals:

Find more targeted leads, to convert into your sales process and increase the percentage of people who move through each phase of the sales process.

This is a very simplified version of a sales funnel.

Sales funnels are crucial to any business trying to make money online. It ensures profitability, maximizes your marketing dollars, and make you more competitive if you work your leads effectively and offer bigger and better products and services that have a higher value.

This is why it is important to have a sales funnel as it helps you leverage the leads that you do have, and covert them eventually to buyers, and then convert that buyer from a simple purchase to a multiple purchase buyer.

Make makes the value of each lead much higher. In turn each prospect is worth more, as is each buyer, which makes your business increasingly more profitable.